Stock-Based Compensation

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

We maintain long-term incentive plans for management, other personnel, and key service providers. The plans allow for granting stock-based compensation awards, based on CEC common stock (NASDAQ symbol “CZR”), including time-based and performance-based stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), market-based stock units (“MSUs”), restricted stock awards, stock grants, or a combination of awards. Forfeitures are recognized in the period in which they occur.

2017 Performance Incentive Plan (“2017 PIP”)

In 2019, the Company granted approximately 975 thousand PSUs that are scheduled to vest in three equal tranches over a three-year period. On each vesting date, recipients will receive between 0% and 200% of the granted PSUs in the form of CEC common stock based on the achievement of specified performance and service conditions. Based on the terms and conditions of the awards, the fair value of the PSUs was initially set equal to the quoted market price of our common stock on the date of grant. The grant date fair value is reassessed at each reporting date to reflect the market price of our common stock until a mutual understanding of the key terms and conditions of the awards between the Company and recipient is achieved.

Also in 2019, the Company granted approximately 703 thousand MSUs that are scheduled to cliff vest in three years. On the vesting date, recipients will receive between 0% and 200% of the granted MSUs in the form of CEC common stock based on the achievement of specified market and service conditions. Based on the terms and conditions of the awards, the grant date fair value of the MSUs was determined using a Monte-Carlo simulation model. Key assumptions for the Monte-Carlo simulation model are the risk-free interest rate, expected volatility, expected dividends and correlation coefficient. The effect of market conditions is considered in determining the grant date fair value, which is not subsequently revised based on actual performance.

Composition of Stock-Based Compensation Expense

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2019		2018		2019		2018
Corporate expense	$	15	$	13	$	48	$	41
Property, general, administrative, and other	4		4		14		14
Total stock-based compensation expense	$	19	$	17	$	62	$	55

Outstanding at End of Period

	September 30, 2019			December 31, 2018
	Quantity	Wtd-Avg ⁽¹⁾		Quantity	Wtd-Avg ⁽¹⁾
Stock options ⁽²⁾	3,398,272	$	13.68	8,360,365	$	10.63
Restricted stock units ⁽³⁾	11,335,211	11.12		13,455,092	11.51
Performance stock units ⁽⁴⁾	1,574,182	11.66		1,466,183	6.79
Market-based stock units ⁽⁵⁾	482,459	12.63		—	—

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⁽¹⁾	Represents weighted-average exercise price for stock options, weighted-average grant date fair value for RSUs, the price of CEC common stock as of the balance sheet date until a grant date is achieved for PSUs and the fair value of the MSUs determined using the Monte-Carlo simulation model.


⁽²⁾	During the nine months ended September 30, 2019, there were no grants of stock options and 4.8 million stock options were exercised.


⁽³⁾	During the nine months ended September 30, 2019, 5.2 million RSUs were granted under the 2017 PIP and 5.2 million RSUs vested.


⁽⁴⁾	During the nine months ended September 30, 2019, 975 thousand PSUs were granted under the 2017 PIP and 549 thousand PSUs vested.

⁽⁵⁾

During the nine months ended September 30, 2019, 703 thousand MSUs were granted under the 2017 PIP and 35 thousand MSUs vested.